Group Of US Doctors Disapprove Possible CVS-Aetna Merger

An organization representing U.S. doctors and physicians said it disapproves CVS Health's plan to merge with insurance provider Aetna, claiming that the move could cause a hike in prescription drug prices.

The American Medical Association (AMA) in a letter sent Tuesday to the Justice Department asked the department to block a possible merger, claiming that the deal would decrease competition among pharmacy benefit managers (PBM), which controls which drugs are insured and negotiates discounts on those medications with their manufacturers.

It added that the merger could also hike up Medicare Part D prescription drug plan for seniors, pharmacy benefit manager services, local health insurance and local retail pharmacy markets.

CVS made the proposal to acquire Aetna in December 2017 in a deal worth $69 billion.

AMA President Barbara McAneny in a statement Wednesday said that CVS and Aetna are in competition in some of the same markets and that a merger would raise "substantial concerns" to the "detriment of patients."

"We believe that competition within each of the business segments in which we operate pharmacy benefit management, pharmacies and insurers is fierce and will remain so," the company said in a statement.

Many analysts have also said they believe the proposed deal could benefit the pharmaceutical industry. RBC Capital Markets' Frank Morgan told CNBC in October 2017 that he thinks such mergers could provide savings for customers.

"Combining the health-care benefit with the drug benefit — there really are some savings that you can get when you coordinate those two benefits together," Morgan said.